A place-based approach to payments for ecosystem services

What is it about?

A place-based approach to payments for ecosystem services (PES) is where "multiple ecosystem services [benefits from nature] delivered in the same landscape in a voluntary transaction between buyers and sellers of services, as part of a scheme that is developed and governed by partnerships of relevant stakeholders who hold shared values for the landscape." This paper shows how this approach was developed and applied in the development of a PES scheme for UK peatlands.

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Photo by Sean Paul Kinnear on Unsplash

Photo by Sean Paul Kinnear on Unsplash

Why is it important?

The scale of environmental challenges facing the world today are beyond the reach of public budgets in most countries, and so there has been growing interest in Payments for Ecosystem Service schemes that can combine public funding with private investment to restore and enhance the benefits society gets from nature. Most schemes are habitat or location specific, and do not treat landscapes as a whole including the people who live and work there. A place-based approach enables stakeholders to come together around the marketing of ecosystem services, aggregating supply and selling multiple benefits to buyers at a landscape scale. Peatlands are internationally important for their carbon storage and climate mitigation potential (they store more carbon than the world's forests), biodiversity, water quality and flood risk alleviation. The International Union for the Conservation of Nature's UK Peatland Programme has set a target to repair 2 million hectares of UK peat bogs by 2040. That’s equivalent to 3.2M football pitches. If you laid those football pitches end-to-end they would stretch around the world eight times. There is not enough public funding, even in a relatively well-off country like the UK, to even approach a challenge this size. That’s why we developed the Peatland Code, to access private funding for restoration alongside public funding. The potential for privately funded place-based schemes like the Peatland Code to deliver benefits alongside publicly funded schemes has been recognised in the UK Government’s 25 year environment plan. There is no set price per tonne of carbon for a Peatland Code project – it varies depending on the costs of restoration (which vary widely) and the attractiveness of the location and co-benefits of a project to potential buyers. To date there are four projects validated or in the process of validation and a further 17 projects in the pipeline. The first fully validated project is restoring 77 hectares of peatland affected by drainage and bare peat erosion, and is expected to reduce emissions by at least 6484 tCO2e over 45 years. That’s equivalent to 4488 flights from London to Sydney. Schemes like this don’t just work in countries like the UK. They have the potential to raise restoration finance in the poorest countries of the world, in ways that can compliment the UN Climate Treaty. Projects financed under the Peatland Code can also be accredited under voluntary carbon market standards and can contribute towards national emission reduction targets. But restoration is often not financially viable under the voluntary market or the compliance market that was created by the climate treaty due to the low price of carbon on these markets. The creation of “regional carbon markets” like the Peatland Code enables prices to be set on the basis of restoration costs and multiple benefits, as long as there are buyers. As a privately funded scheme, it can support land managers without falling foul of WTO rules limiting Government support for agriculture.